Averting Another South Korea Ferry Disaster

(Corrects Park Geun Hye's title in the sixth paragraph of an editorial published April 29.)

In the aftermath of the ferry tragedy in which 302 passengers, most of them high school students, may have died, South Koreans have had more than one target for their rage: not only the captain and crew of the Sewol, who botched the evacuation and then abandoned ship, but, more important, the shipping company and regulators, who appear to have cut corners on safety.

The test of whether South Korea has learned anything from this disaster will be whether it can finally sever the ties that have long bound industries, including shipping, and the Korean government in a web of influence that undermines public safety. Ministries in South Korea -- no less than those in Japan -- can take justifiable pride in having directed the postwar industrial resurgence that lifted their nation into the ranks of the developed world. But for many years now, this once-fruitful partnership has become little more than a means of nest padding, as retired bureaucrats take high-paid positions at companies, industry associations and regulatory agencies that they in turn shield from stricter government oversight.

Lawmakers and activists have long vowed to end these “parachute appointments.” A scandal last year in South Korea’s nuclear industry exposed how powerful retired officials had taken jobs in the sector, then bribed their former colleagues to accept faked safety certificates and shoddy parts for several reactors. While a code of ethics instructs civil servants to wait two years before taking jobs with companies once under their oversight, the delay doesn't apply to research institutes and industry associations. By one estimate, at 100 private organizations whose work relates to the Ministry of Trade, Industry and Energy, 70 percent of executive-level jobs are held by former officials. The Ministry of Strategy and Finance is so notorious in this regard that its well-placed alumni are known as the “Mofia.”

Investigators looking into why the Sewol listed so hard after a sharp turn have focused on renovations that made the ferry top-heavy, as well as the overstuffing of its cargo hold. They’ve raided the offices of the Korean Register of Shipping, which had declared the Sewol fit to sail, and the Korea Shipping Association -- a trade group of shipping companies and owners that certifies cargo safety. Since 1978, eight of the register's 10 presidents and all of the shipping association's board chairmen have come from government ministries.

This closed system needs to be cracked open. That means not just removing the revolving door between government and industry but also making public the process of writing and enforcing safety regulations. A place needs to be found for retired officials -- many of whom have many working years ahead of them -- outside their former fiefdoms. They should be retrained and encouraged to take part in the "creative economy" that President Park Geun Hye is promoting as an alternative to the system of industrial conglomerates, or chaebol, that powered the country's rise.

Park is not the first president to come to office vowing to ease the stranglehold of the ministries. Past leaders, though, lost some of their reforming zeal once they realized they couldn’t accomplish much in a five-year term without the bureaucracy's help.

Park cannot afford to drag her feet as her predecessors did. She, too, has been accused of promoting unqualified political cronies into positions at state-owned companies; in January, 15 out of 40 nominees to public companies were reported to be ruling-party politicians, while another nine were government officials. Since the Sewol sank, she has had to accept the resignation of her No. 2, Prime Minister Chung Hong-won, and has seen her popularity ratings plummet 15 percentage points. Outraged Koreans will no longer accept mere pledges to improve public safety -- nor should they.

To contact the senior editor responsible for Bloomberg View's editorials: David Shipley at davidshipley@bloomberg.net.

Editorials are written by the Bloomberg View editorial board.
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